The GBP/USD pair has retreated following a short-lasting rebound toward 1.1800. This is coming after the pair turned south and retreated towards the 1.1750 area.
The US Dollar Index (DXY) retreats from the monthly high, down 0.08% intraday near 108.87 at the latest. With this, the greenback’s gauge versus the six major currencies tracks the US Treasury yields as the benchmark 10-year bond coupons drop two basis points (bps) to 3.02% at the latest.
It’s worth noting that the DXY rose to the six-week high the previous day, and also printed a four-day uptrend, amid fears of recession and increasing hawkish Fed bets. The US dollar excelled after Chicago Fed National Activity Index improved to 0.27 in July, from a downwardly revised -0.25 prior. “Fed funds futures on Monday have priced in a 54.5% chance of a 50 basis-point (bp) rate hike at the Fed’s policy meeting next month.
According to Reuters, the fed funds rate is seen hitting roughly 3.6% by the end of the year, with a peak rate of nearly 3.8% in March 2023.